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UK investment nearly doubled in 2017: what’s happening underneath

Written on February 9, 2018 by Yoram Wijngaarde

Click image to enlarge. Open the PDF for a higher-resolution.

The advent of big tech and mega-rounds

UK investment nearly doubled from $4.2 to $7.8 billion in 2017. Mega-rounds were a major growth driver. For instance, 2017 saw 22 rounds over $50 million, compared with nine in 2016. However mega-rounds were not the only factor: even when excluding the top-10 rounds in each year, investment increased from $3.2 to a new record of $5.1 billion. Note that the decline in number of rounds will likely reverse, once all smaller 2017 rounds have been announced.

Is UK investment overheating? 

One way to answer this question is by comparing investment per capita. U.S. investment in 2017 was $250 per capita (320 million people, ~$80 billion(1) investment). UK investment in 2017 was $120 per capita (65 million people, ~$7.8 billion investment). The chart below gives a pan-European view:

The above chart indicates that European VC investment still has plenty of upside. European tech is growing up. And the UK acts as a crucial tech hub to Europe’s 700 million people. UK investment now accounts for 37% of all venture capital investment in Europe. Indeed, the vast majority of funded UK companies are active across Europe.

More capital is available than ever before

Europe’s venture capital industry has been on the rise with more capital available than ever. At the same time, UK investment from the USA and Asia more than doubled in 2017. Corporate investment into the UK also more than doubled. Investment from domestic UK funds also grew, but less so (more on that below).

What about any impact from Brexit?

A year ago when VC activity in the UK did decline, we stated that Brexit was not driving that decline. We’re opposed to the idea of Brexit, but high-growth tech companies are among the least vulnerable constituents, at least in the short term. Manufacturing, hospitals, and finance employment are more vulnerable. The long-term ramifications on tech have yet to play out (macro impact on consumer demand, ability to attract foreign talent). Luckily for the UK, big tech players like Facebook, Amazon, Softbank and Google all placed firm votes of confidence on the UK in 2017.

Are there any warning signs in UK market conditions?

Firstly, the UK is seeing a decline in seed rounds below $1 million while this trend is not yet visible in Continental Europe. However, UK seed rounds larger seed rounds.

Secondly, the UK is no longer the undisputed capital of European venture capital. Continental Europe’s venture capital industry is catching up to the UK. The following heatmap shows how France is nearly on par with the UK while other countries are also on the rise, for example:

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1. $80 billion investment in the U.S. as per average of Pitchbook and CB Insights

Europe’s most active venture capital investors: Bpifrance leads

Written on February 4, 2018 by Yoram Wijngaarde

The heatmap above (click to enlarge) shows the most active venture capital investors in 2017, by number of European rounds. Again, Bpifrance leads again by a wide margin. The heatmap (click to enlarge) also shows the main investment themes of the most active investors.

What about Europe’s most prominent venture capital investors? What are their preferred investment themes? The below heatmap shows where the investment elite is investing its capital: Fintech, SaaS, Deep Tech, Health Tech received the most allocation, which is in line with broader market (click to enlarge):

Want to find out more? Dealroom.co tracks over 9,000 active professional investors.

Dealroom ecosystem solutions, explained

Written on January 20, 2018 by Yoram Wijngaarde

Startup Lithuania launched a new startup database, powered by Dealroom. What does “powered by Dealroom” mean, exactly?

  1. Your data is maintained daily by Dealroom; this means continuity post launch
  2. The frontend also is managed by Dealroom & regularly upgraded
  3. You retain control over your website. Integration is via subdomain* or iframe
  4. Customised branding, design and navigation
  5. Users can sign up to claim their companies and enhance data

In short: easy deployment of an end-to-end solution, without disruption to the existing website. The result?

  • A public comprehensive up-to-date overview of the current ecosystem
  • Valuable insights for policy-making: growth trends, employment impact, identifying success-factors
  • The entire ecosystem becomes more accessible to the global stage
  • More networking and knowledge sharing within your ecosystem

To learn more, contact us. Below are selected examples of existing maps & databases.

StartupAmsterdam (live since 2015, launching customer)

European Commission’s StartupEurope (live since 2015)

StartupDelta Netherlands (live since 2015)

StartupBahrain (live since 2017)

Techstars (live since 2016)

RomaStartup (live soon!)

Vilnius Tech Map by GoVilnius (live since 2017)

StartupLithuania (live since 2018)

Google Campus Warsaw (live since 2016)

iAmsterdam (live since 2015, iFrame)

StartupLithuania (live since 2018 iFrame)

10 data-driven insights about European tech in 2017

Written on January 8, 2018 by Yoram Wijngaarde

Insight #1: A record €19.4 billion in venture capital was invested into European companies in 2017

Investors continued betting on European tech at a record pace. Preliminary Dealroom data shows that €19.4 billion in Venture Capital was invested into European companies in 2017, a staggering 36% increase from €14.3 billion in 2016.

Including Israel the combined figure was €22.3 billion in 2017, a 31% increase from €17.0 billion in 2016. As a result, European tech companies have more capital at their disposal than ever before, available to grow their workforce, invest in technology, in marketing and make acquisitions.

The number of rounds declined, from 3,900 in 2016 to 3,377 in 2017, a decline of 13%. A caveat is needed here however, because many 2017 rounds will appear with a 12-24 month delay (especially smaller rounds, which often appear only once a follow-on round has been announced).

Pro tip: click below and customise the chart by adding/removing keywords (e.g. Germany as location or Series A rounds). Talk to us on Intercom (bottom-right) for help.

Insight #2: Bigger and more mega-rounds than ever; but even excluding those mega-rounds 2017 was still a record by far

There were 19 rounds above €100 million in 2017, compared with 10 in 2016 (90% increase). The rise of mega-rounds was driven by corporate investment activity, involvement of big global funds like SoftBank, and an overarching trend towards big tech (i.e. market consolidation).

Importantly to note however, that even excluding the top 3 or even top 10 rounds in each year, 2017 was a record by far, as the below interactive chart shows:

Insight #3: UK tech companies defied Brexit and doubled the amount of capital raised in 2017 to €7.5 billion; that’s 38% of all venture capital invested in Europe

UK companies received €7.5 billion in venture capital in 2017, a 103% increase from €3.7 billion in 2016. That’s 38% of Europe’s total! The number of VC rounds declined by 7%, from 811 in 2016 to 757 in 2017. However, this 7% decline will likely turn into an increase, once all smaller rounds have been announced.

What about Brexit’s impact? As Dealroom stated a year ago (when VC activity in the UK did decline), Brexit unlikely impacted those numbers. We’re opposed to the idea of Brexit, but high-growth tech companies are among the least vulnerable constituents, at least in the short term. Manufacturing, hospitals, and finance employment are more vulnerable. The long-term ramifications on tech have yet to play out (macro impact on consumer demand, ability to attract foreign talent). Luckily for the UK, big tech like Facebook, Amazon and Google all placed firm votes of confidence on the UK in 2017.

That said, there are two worrying signs in the UK: the decline of seed investment and of fundraising by VC firms. More on both further below.

Insight #4: By number of rounds, France and the UK are going head-to-head

Companies in the UK raised almost 3x more capital than Germany (2nd) and France (3rd). The below heatmap provides a real-time view of venture capital investment by country. Click on change view to switch to number of rounds and/or show quarterly data.

By number of rounds the trend is not skewed by mega rounds; France and the UK are going head-to-head, as the below heatmap shows. Moreover, if crowdfunding rounds are excluded, the 2017 number of VC rounds in France (679 rounds) is higher than the UK (629 rounds).

You can also switch view to cities, industries, business models and topics. Europe’s leading tech hubs of 2017 are: London, Paris, Stockholm, Berlin, Barcelona and Amsterdam.

Insight #5: Investment from Asia tripled in 2017; investment activity from the USA doubled (after a dip in 2016)

After a dip in 2016, investment into Europe from the USA is back at record levels. In 2017 there were 444 rounds with USA investors. The total amount doubled from €4.1 billion to €8.1 billion (total value of rounds with at least one USA investor).

And it’s not just the UK, increasingly USA investors place large bets in continental Europe. Examples include: Roivant, ADC Therapeutics, Letgo, Soundcloud, Tricentis, Snow, Cabify and others.

Investment coming from Asia is rapidly catching up however, with 138 rounds in 2017, up 68% from 82 in 2016. The amount of capital invested tripled from €1.3 billion to €4.1 billion.

The number of rounds without any participation from European investors declined in 2017. That’s a positive sign, but European investors did completely miss some landmark deals like Roivant and Improbable.

Insight # 6: Corporate investing grew to €6.2 billion, equal to 32% of European VC

Corporate investing has been on the rise for a while and this trend continued into 2017. Corporate investors include Naspers (Delivery Hero, Kreditech, Letgo, SimilarWeb), JD.com (Farfetch), SAP’s Sapphire Ventures (TransferWise), and many financial institutions (BBVA, Barclays, BNP Paribas).

Insight # 7: The so-called implosion of early stage investing is greatly exaggerated, at least in Europe; exception is UK

Reports emerged elsewhere about a worldwide decline or even implosion of seed stage investing. The following chart shows rounds €100K to €1 million (which you can adjust according to your own preference using “advanced” search) indicating no such trend in Europe . Even the modest decline shown in 2017 will likely disappear because, as mentioned above, many seed rounds are announced with a 18-24 months delay (after the first follow-on round).

A notable exception is the UK where early stage investing peaked in 2014:

Is the notion of an early stage crunch completely baseless then? There is sense of more healthy restraint in early-stage investing. As ecosystems mature, experience causes reality to set in.

Insight #8: VC industry in continental Europe is catching up to the UK

Halfway 2017 Dealroom reported that French VC firms overtook VC firms in the UK by amount of new funds raised, for the first time ever. For the full year 2017, UK and France are going head to head, as shown in the below new funds heatmap. Of course, this is based on only one year of data. Additionally, the UK remains the go-to destination for USA investors with a European branch.

For founders across Europe, funding options have vastly improved. Dealroom analysis has shown that for early stage funding (below €10 million) domestic funding is on the rise, while for larger rounds cross-border funding is on the rise (above €10 million). This seems like a very healthy development.

Insight #9: Investors doubled down on Healthtech and Fintech, which attracted the most venture capital in Europe in 2017, as in 2016

Fintech companies in Europe raised €3.9 billion, more than doubling from €1.8 billion in 2016. The number of fintech rounds was stable at around 519. Healthtech raised €3.7 billion, up 68% from €2.2 billion in 2016. The number of healthtech rounds was down from 606 to 467. The following heatmap shows the exact breakdown within Europe. Use the buttons highlighted in red to switch views.

Deep tech (which includes artificial intelligence, robotics, semiconductors) continues to be an important theme for European tech. Albeit a subjective term hard to define precisely, it is useful to track deep tech investment activity. Also see Dealroom’s October 2016 report on the Artificial Intelligence & Deep Tech in Europe. Blockchain and bitcoin investment is still relatively small, but growing rapidly. The below heatmap shows funding trends by investment topic:

Insight #10: VC-backed exits disappointed by amount of capital returned, but the number of exits grew significantly 

VC-backed exits in 2017 returned about €10 billion in capital; a disappointing figure by any measure. By comparison, in 2016 €34 billion of capital was returned, a healthier number when compared against the €10-15 billion capital typically invested each year.

Should we be alarmed? The full picture is more nuanced. Returned capital tends to be extremely concentrated around a few large exits, and hence it is volatile. The number of VC-backed exits grew from 260 in 2016 to 282 in 2017. Moreover, Europe’s near-term exit pipeline is looking very promising (Spotify, Adyen, Transferwise, Deliveroo, Klarna, and many others).

Beyond that, venture capital have become firmly focused on potential mega-outcomes areas such as consumer banking, healthcare, and mobility. VC-backed exits deserve a more thorough review, which we will provide soon.

Notes on methodology:

  • Venture capital funding excludes debt, lending capital, grants and ICOs (as can be seen from the query). It also excludes secondary rounds, buyouts, M&A and IPOs
  • Europe excludes Israel, unless specified otherwise
  • Atomico’s widely read 2017 State of European Tech report uses Dealroom data for capital flows analysis, but makes some adjustments, mainly by excluding biotech and converting to USD (€17.3 billion x 1.10 = $19 billion)
  • Regarding heatmaps: some companies are active in more than one industry, so the total adds up to more than total funding
  • Dealroom data is collected by consolidating manual research, web-scraped data, natural language processing of public news-flow, and verified user-generated data. Dealroom data is trusted by the world’s leading publications and used by world-class companies including Silicon Valley firms, VC and buyout firms, multinationals and governments

Dealroom: the industry source of record for European tech

Written on January 3, 2018 by Yoram Wijngaarde

More and more publications are recognising Dealroom as the industry standard for data, insights and identifying new trends in European tech: The Financial Times, The Economist, The New York Times, Les Echos, Reuters and many others have featured Dealroom data in 2017. Below is an overview of selected articles:

International

The Washington Post on VC funding in UK and France

The New York Times on French tech and the launch of Station F

The Economist on the stunning rise of French Tech

Bloomberg on Station F: Francois Hollande Now Works Part-Time in a Mega Campus for Startups

Politico on UK VC funds being overtaken by European venture capital funds, post Brexit

Business Insider on Europe’s most prominent European VC investors

The Financial Times on the need for European scale up capital

The Financial Times on VC funding in France

The Financial Times on VC funding post Brexit

The Financial Times on European Unicorns

TechCrunch on Atomico’s State of European Tech 2016

Reuters on Eastern European tech

VentureBeat on now being the best time ever to be an entrepreneur in Europe

 

United Kingdom

The Independent on Eastern European Tech

Wired UK on the UK’s top investments

Wired UK on Europe leading the way in AI

Wired UK on Investments in London despite Brexit

Wired UK on State of European Tech report

Evening Standard on France overtaking UK in fundraising by Venture Capital funds

 

France

Les Echos on Europe as the gravitational center of Deep Tech

Les Echos on why French tech is opening its borders

Les Echos on France overtaking UK in fundraising by Venture Capital funds

La Tribune on France overtaking UK in fundraising by Venture Capital funds

Germany

Wired DE on Tech in Europe

Berlin Valley on the startup news of the week

 

Italy

Business Insider Italia on Italian VC Funding

Il Sole 24 Ore with multiple posts featuring Dealroom

Il Corriere De La Sera on startups in Italy

Il Corriere De La Sera on challenges of Italian Venture Capital

 

Spain

La Vanguardia on Europen Startups fund raising

La Vanguardia on Madrid versus Barcelona as startup capitals

 

Logos of news websites we have been featured in

Request data here

Career Opportunities at Dealroom

Written on December 13, 2017 by Yoram Wijngaarde

About Dealroom

Dealroom is Europe’s leading database for startups, technology and venture capital. We track technology companies worldwide, using a combination of user-generated data, machine learning, and manual curation. Our mission is to enable better and faster investment decisions by providing actionable insights and decision-support tools. Our clients are venture capital & private equity funds, investment banks, consultants and corporate executives.

Career opportunities

Dealroom is growing fast. We have a number of career opportunities across multiple disciplines, based in Amsterdam:

  1. Developer (Frontend and/or Backend)
    We are looking for frontend (JS React) and/or backend (PHP) developers to join the existing development team. You and the rest of the product team will be jointly responsible for delivering a top-quality SaaS product and UX to our clients (investment professionals, corporate executives and founders).
  2. Sales & Marketing Roles
    We are looking for highly driven individuals in both Sales and Marketing. As Business Development Manager, your task is to identify potential clients, engage with them to understand their needs and help them bring their data to the next level. As Marketing Manager, your role is to engage with existing and potential new end-users through on/offline channels. You will also be responsible for establishing partnerships with local ecosystems.
  3. Junior Research Analyst
    As a research analyst, you are responsible providing for turning data into insights, and help our clients understand how technology is shaping their future. We are not looking for experts per se, but rather for analytical and curious minds.
  4. Research Intern
    Throughout the year we offer internship positions for students from all educational backgrounds. You will work directly with Dealroom’s CEO and the rest of the team. Learn everything about the world of technology, startups, and venture capital.

Major upgrade to heatmaps

Written on December 10, 2017 by Yoram Wijngaarde

Over the past weeks we’ve implemented a major upgrade to the popular heatmaps. Here’s a quick overview of what’s new:

Feature #1: you can now change view to yearly vs. quarterly and by amount vs. by number of rounds. Also, you can now export data

Feature #2: you can now view heatmaps within selected markets. For example, here are top industries in the UK:

Feature #3: you can now view new VC funds by country. As you can see below, UK and France are going head-to-head by amount of new funds raised by VCs:

We hope you enjoy! For any questions please contact us via Intercom in the bottom right of your screen.

Amsterdam tech: over 60K jobs, with 10K net jobs added in last two years alone, new Dealroom report shows

Written on November 26, 2017 by Yoram Wijngaarde

Amsterdam has rapidly become a top-tier tech hub in Europe. The city is home to Dutch companies such as Adyen, Takeaway.com, Booking.com and MessageBird. Several major global tech companies have made Amsterdam their European hub, such as Uber, Netflix and Tesla. But how many people work in Amsterdam’s tech community? What is the overall impact on the Amsterdam job market? A new report, prepared by Dealroom.co and commissioned by StartupAmsterdam answers these questions.

The report is free to download here

Key findings

  • About 60K people work at 1,052 tech companies in Amsterdam, thus representing 11% of the total 527K job market in Amsterdam (1)
  • 756 companies were identified as startups (2-50 people), 263 as scale-ups (51-500 people), and 33 as grownups (500+ people)
  • Local tech giants, Booking.com, TomTom and Adyen, together employ nearly 6K people in Amsterdam. The 30 largest home-grown companies represent 16K jobs (= 48% of home-grown jobs and 26% of total jobs)
  • 859 companies are home-grown (founded in Amsterdam), representing 55% of all 60K jobs. 184 companies are major foreign tech companies with significant presence in Amsterdam such as Uber, Netflix, Microsoft (representing 45% of 60K jobs)
  • The main growth drivers are home-grown startups & scale-ups, growing jobs by 13% per year between 2015 and 2017, and foreign tech companies growing jobs by another 9% per year (2)
  • Over 10K jobs were added in two years, making tech a major driver of job growth in Amsterdam, matched only by the hospitality sector (restaurants, bars, hotels), and growing well ahead of finance and other major sectors
  • Venture capital activity, which has tripled in the last 4 years, is acting as an important catalyst to job growth. In 2016 Dutch VCs raised records amounts of capital. This means plenty of dry-powder still to be invested in 2018 and 2019

Scope & methodology

  • This report is prepared by Dealroom and commissioned by StartupAmsterdam, who also provided hands-on support with data and data-cleaning
  • A bottom-up approach (company-by-company) was applied by using Dealroom’s own database as foundation, with additional desktop research
  • StartupAmsterdam provided valuable input and made supporting data available
  • This report focuses exclusively on tech-centric companies in Amsterdam, Schiphol Airport and Amsterdam Zuid-Oost, between 2015 to 2017
  • Included are startups (2-50 people), scale-ups (51-500 people), grownups (500+ people) and foreign tech companies with significant presence in Amsterdam
  • Excluded are companies with one employee. Not counted are tech jobs at multinational companies (Shell, Philips, ING…)
  • Most of the data used in this report is available for free via the Amsterdam Startupmap, a crowd-sourced & free resource, powered by Dealroom
  • Dealroom anticipates doing recurring updates of this study to monitor the evolution of Amsterdam’s tech ecosystem

About Dealroom

Founded in 2013 in Amsterdam, Dealroom helps corporations, investment firms and governments to track innovative companies and identify strategic opportunities, through data-driven software which is accessible via dealroom.co. World-class corporates, venture capital & private equity firms, consultants and banks use Dealroom’s software, database and bespoke research to identify & track growth opportunities and stay at the forefront of innovation.

Notes:

  1. Source: City of Amsterdam’s ARRA database.
  2. Bron: Estimate by Dealroom based on years 2011-2017.

Useful links:

Report: https://blog.dealroom.co/wp-content/uploads/2017/11/Amsterdam-Nov-2017-vFINAL.pdf
Image: https://blog.dealroom.co/wp-content/uploads/2017/11/Amsterdam-Nov-2017-vFINAL.png
Amsterdam Startupmap: https://startupmap.iamsterdam.com/map